It doesn’t take a rocket scientist to figure this out, but Australia could use more rocket scientists to lead the way to future prosperity.
In today’s expensive and competitive markets, a good company will always search for efficient and productive gains through incremental innovations, such as process improvements and adoption of best practices.
However, companies still must improve their market relevance and value by seeking out value-creating innovations using science, technology, design, art and reverse hermeneutics — which is productivity defined as doing smarter things in smarter ways.
But most innovation projects are focused on smaller, incremental improvements. Only about $1 out of every $7 spent on R&D by firms around the world is put toward radical or ‘break-through’ innovations. With the rising rate of technological development, this isn’t a sustainable balance for success. The majority of top level executives would rather put their focus on investing in riskier initiatives.
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This is easier said than done, as most firms lack the necessary capabilities in-house. Instead, they need to reach outside their comfort zones to cooperate more closely with others in the innovation ecosystem — universities, individuals and government research organisations — to develop a pipeline of high real option value innovation projects; improve execution of these projects to hasten both time-to-market and time-to-full-cost-recovery; and maximise the net present value of the innovation when brought to market.
Unfortunately, Australia is currently not very good at this kind of cooperation.
But fortunately for Aussies, new Prime Minister Malcolm Turnbull is a man who believes fostering innovation is what will boost Australia’s economy.
With the change in leadership there’s finally a chance to work with a federal government toward executing and implementing co-ordinated, centralised innovation policy instead of having to educate a government on why it’s important.
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A recent Committee for Economic Development of Australia report, launched by Turnbull, warned that 40 per cent of Australia’s workforce — more than five million people — could be replaced by automation within the next 10 to 15 years. These aren’t just low-skilled jobs. They are jobs held by highly skilled, highly paid workers.
With Turnbull in pursuit of the same goal and passionate about the same issues, we can only urge him to continue his push to create an ecosystem within Australia where the world’s most promising companies can form, grow and thrive.
Looks like we’re finally on the right track.
Enjoy Labour Day!